I have no personal beef with Marc Faber, editor of The Gloom, Boom & Doom Report. And I fully understand the nature of the pundit game where you only get noticed if you make an outrageous call.
But this guy just needs to sit down and be quiet.
He’s making the rounds most recently saying investors need to brace for a drop of 20% or more in the market by year’s end, likening the environment to the dark days of 1987.
Here’s him on CNBC this week:
“In 1987, we had a very powerful rally, but also earnings were no longer rising substantially, and the market became very overbought. The final rally into Aug. 25 occurred with a diminishing number of stocks hitting 52-week highs. In other words, the new-high list was contracting, and we have several breaks in different stocks.”
Faber went on:
“The only way this market can go up is if the 10 or 50 stocks that are very strong continue to drive the market higher, with the majority of stocks having actually peaked out.”
Look, I’m not going to say I’m not worried about a pullback, or that there aren’t a host of stocks moving higher on rather mediocre numbers.
But it’s worth noting that Marc Faber made similar predictions in May and February … and said stocks should have crashed 50% on Obama’s re-election in November. You know, just before a 25% run for the market kicked off.
I frequently pick bad stocks, pan good ones and on the whole make a fool of myself.
Bu at least I admit mistakes and correct course. Faber doesn’t have to be right 100% of the time, but he has to learn how to be wrong intelligently by acknowledging the current environment instead of just making the same tired speech over and over again.
- The full Marc Faber interview. (CNBC)
- Of course, some other bears say Faber is on to something. (Zero Hedge)
- A previous (and — you guessed it! — painfully incorrect) prediction from Faber from the spring. (The Slant)
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP.